After what turned out to be a minor hiccup when it looked as if Barnes & Noble’s purchase of Borders’s intellectual property assets might founder because of Judge Martin Glenn’s concerns over privacy issues, Borders and the Creditors’ Committee together with the consumer privacy ombudsman Michael St. Patrick Baxter got things back on track within a matter of days. The transaction was approved late last month with the proviso that Barnes & Noble give customers the ability to opt out.
Now new concerns have arisen. In a supplemental report filed with the court, ombudsman Baxter takes Barnes & Noble to task for not disclosing the extent of the personally identifiable information, or PII, transferred. He also points out that the notice implied that the opt-out option was due to Barnes & Noble’s generosity rather than a court order. Although Baxter informed Barnes & Noble that these two things had to be included in its opt-out notice, the retailer’s attorney, Paul Zumbro, responded that the notice met the terms of the sale, and Barnes & Noble sent it anyway, or tried to.
According to a letter from Zumbro delivered last Friday and addressed to Judge Glenn, Barnes & Noble encountered technical difficulties preventing it from complying with the requirements of the sale order and sending opt-out notices to customers who had previously elected not to get such e-mail notices. In addition, because of industry protocol regulations, Barnes & Noble might not be able to send opt-out notices to customers who earlier elected not to receive such e-mails. “Accordingly,” wrote Zumbro, “B&N was and remains to date unable to send to the Marketing Opt-Out Customers the e-mail opt-out notice that the Order requires to be sent by B&N on or within one business day after the closing date of the sale of Borders IP assets to B&N (which occurred on September 30, 2011).”
